Sunlands Technology Group (STG) Q4 2025 earnings summary

Executive summary

• Achieved nineteenth consecutive quarter of profitability, with a focus on operational discipline, efficiency, and positive cash flow throughout 2025.

• Full year net income increased 6.9% to RMB 365.6 million, with a strategic emphasis on interest-based and senior learner programs and continued investment in AI and technology.

• Maintained disciplined growth and prudent capital allocation.

Financial highlights

• Fourth quarter net revenue was RMB 470.2 million, down 2.7% year-over-year; full year net revenue was RMB 2.02 billion, up 1.5%.

• Fourth quarter net income was RMB 38.4 million, compared to RMB 47.8 million a year ago; full year net income was RMB 365.6 million.

• Gross margin expanded by 2.9 percentage points to 86.9% for the full year; net margin reached 18.1%.

• Basic and diluted net income per share was RMB 5.72 in Q4 2025; full year RMB 54.28.

• Deferred revenue at year-end was RMB 585.3 million, down from RMB 916.5 million.

Outlook and guidance

• First quarter 2026 net revenues expected between RMB 420 million and RMB 440 million, representing a year-over-year decrease of 9.8%-13.9%.

• Guidance reflects current market and operating conditions, with substantial uncertainty.

• Focus remains on high-quality growth and leveraging AI in curriculum and user experience.